Justia Contracts Opinion Summaries

Google sent an email to users, such as Plaintiff, who had contributed photos to Google maps but had not yet joined the company’s Local Guides Program, inviting them to join the program. Plaintiff joined the Local Guides program and claimed his terabyte of free Google Drive storage. Google advised him the benefit was for two years, and Plaintiff contended that when he read the initial email, he assumed Google was offering a lifetime benefit. In ruling on Google’s summary judgment motion, the district court considered three documents – the photo impact email, the enrollment page, and the Program Rules - and concluded that they did not constitute a unilateral contract offer for one terabyte of free Google Drive storage for life.   The Ninth Circuit affirmed the district court’s summary judgment. The court explained that advertisements are not typically understood as offers, but that rule includes an exception for offers of a reward. The operative question under California law is “whether the advertiser, in clear and positive terms, promised to render performance in exchange for something requested by the advertiser, and whether the recipient of the advertisement reasonably might have concluded that by acting in accordance with the request a contract would be formed.”   The court reasoned that the Google documents at issue neither informed users how they might conclude the bargain, nor invited the performance of a specific act, leaving nothing for negotiation. The court held that the district court properly granted summary judgment to Google on Plaintiff’s conversion and breach of contract claims. View "ANDREW ROLEY V. GOOGLE LLC" on Justia Law

This was the second time plaintiff-appellant Petrolink, Inc. returned to the Court of Appeal in its suit against Lantel Enterprises. Petrolink filed an action against defendant Lantel Enterprises (Lantel), seeking specific performance of a lease agreement that gave Petrolink the option to purchase a commercial property owned by Lantel at fair market value; Lantel cross-complained against Petrolink, contending that Petrolink was refusing to purchase the property for its fair market value. The parties disagreed as to the valuation of the property and were effectively seeking a judicial determination as to the fair market value of the property so that they could complete the transaction. After years of litigation in the trial court, an appeal, a partial reversal of the judgment, remand, and further litigation, the trial court ultimately concluded that the fair market value of the property was $889,854. The court then calculated a net purchase price of $948,404 by subtracting from the fair market value a credit to Petrolink for the rents that it had paid from the date the purchase should have been completed, and adding a credit to Lantel for the loss of use of the sale proceeds. In its amended judgment, the court ordered the parties to complete the transaction; Petrolink was to deposit $948,404 in escrow and Lantel was to deliver title to the property “by grant deed free and clear of all encumbrances.” Petrolink appealed the amended judgment, arguing that it was entitled to certain additional financial reductions and offsets to the purchase price. The Court of Appeal rejected Petrolink’s contentions and affirmed the amended judgment in Petrolink II. Eleven days after Petrolink II was issued, and four days after Petrolink deposited the purchase funds in escrow, the State of California Department of Transportation (Caltrans) filed an eminent domain action pertaining to the property. The filing of the Caltrans action prevented Lantel from being able to convey unencumbered title, as required by the amended judgment. Petrolink then refused to close escrow. Lantel moved to compel performance under the trial court's order, despite the encumbrance on title resulting from the Caltrans eminent domain action. The Court of Appeal concluded the trial court did not abuse its discretion in ordering Petrolink to accept title encumbered by the Caltrans eminent domain action. "[T]he trial court weighed the equities and concluded that it would be more equitable for Petrolink to bear any burden of the encumbrance created by the filing of the Caltrans action." View "Petrolink, Inc. v. Lantel Enterprises" on Justia Law

Plaintiff entered into a reverse mortgage agreement with Reverse Mortgage Solutions, Inc. (“RMS”). In violation of the Truth in Lending Act (“TILA”), RMS failed to disclose certain information at closing. Section 1635(b) of TILA imposes certain obligations on a creditor, like RMS, after it receives a notice of rescission, but RMS did not comply with those obligations either. Plaintiff sued RMS for, among other things, rescission and failing to honor her rescission rights under TILA.   A jury returned a verdict for RMS, finding that RMS did not fail to honor Plaintiff’s attempt to rescind the loan. However, the district court issued judgment as a matter of law for Plaintiff holding that RMS violated Section 1635(b)’s requirements. It also held that Plaintiff was not required to tender or return, the loan proceeds to RMS.   The Fourth Circuit vacated the district court’s judgment as a matter of law and remanded. The court explained that the district court erred in granting judgment as a matter of law to Plaintiff on the Rescission Count. In response to RMS’s failure to voluntarily unwind the loan or otherwise respond to that notice as required by Section 1635(b), Plaintiff had a right to sue RMS to obtain rescission relief under TILA. But neither Section 1635(b) nor any other provision of TILA provides that the failure of a lender to voluntarily unwind a loan or respond to a notice of intent to rescind allows a borrower to avoid tendering the loan proceeds as part of rescission. View "Teresa Lavis v. Reverse Mortgage Solutions Inc" on Justia Law

The owners of Hotel Erwin and Larry’s (a restaurant adjacent to the hotel) in Venice Beach—Marina Pacific Hotel & Suites, LLC; Venice Windward, LLC; Larry’s Venice, L.P.; and Erwin H. Sokol, as trustee of the Frances Sokol Trust (collectively insureds)—sued Fireman’s Fund Insurance Company alleging the COVID-19 virus was present on and had physically transformed, portions of the insured properties—“direct physical loss or damage” within the meaning of Fireman’s Fund’s first party commercial property insurance policy—but Fireman’s Fund refused to pay policy benefits for covered losses incurred as a result. The trial court sustained Fireman’s Fund’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage.   The Second Appellate District reversed the trial court’s judgment sustaining Defendant’s demurrer to the insureds’ first amended complaint without leave to amend and dismissed the lawsuit, ruling the COVID-19 virus cannot cause direct physical loss or damage to property for purposes of insurance coverage. The court held it was an error at the nascent phase of the case. The court explained that because the insureds adequately alleged losses covered by Fireman’s Fund’s policy, they are entitled to an opportunity to present their case, at trial or in opposition to a motion for summary judgment. The judgment of dismissal based on the trial court’s disbelief of those allegations, whether ultimately reasonable or not, must be reversed. View "Marina Pacific Hotel and Suites, LLC v. Fireman's Fund Ins. Co." on Justia Law

The Court of Chancery dismissed without prejudice Plaintiffs' complaint, holding that the action generally lacked an actual controversy and Plaintiffs sought what amounted to an advisory opinion and that the single portion of the dispute that appeared ripe failed to state a claim upon which relief could be granted.In their complaint, Plaintiffs disputed a company's interpretation of certain provisions in an LLC agreement, The first count was a breach of contract claim seeking a determination regarding the construction of the LLC agreement, and the other count was also styled as a breach of contract claim seeking a declaration that restrictive covenants in certain sections of the LLC agreement were overbroad and unenforceable under Delaware law. Defendant moved to dismiss the complaint under Court of Chancery Rules 12(b)(1) and 12(b)(6), arguing that no justiciable controversy existed. The Court of Chancery granted the motion, holding (1) the claim in count one was unripe, and the claim in count two did not present a justiciable dispute; and (2) the purchase notice claim in count one is dismissed without prejudice under Rule 12(b)(6). View "Klein v. ECG Topco Holding, LLC" on Justia Law

After plaintiff filed this class-action complaint against defendants, defendants filed a motion to compel arbitration. The trial court granted the motion. Plaintiff appealed, and the Court of Appeals affirmed. The Oregon Supreme Court granted review of the matter, finding that plaintiff and defendants executed a contract—the “Driver Services Agreement” (DSA)—for plaintiff to provide delivery services for defendants. The DSA stated that drivers are independent contractors. The DSA includes a section on dispute resolution. That section provides that any party “may propose mediation as appropriate” as a means for resolving a dispute arising out of or relating to the DSA. It then provided that, if the parties did not pursue mediation or mediation failed, “any dispute, claim or controversy” arising out of or relating to the DSA—including disputes about “the existence, scope, or validity” of the DSA itself—would be resolved through binding arbitration conducted by a panel of three arbitrators. The DSA also included a savings clause, which allowed for the severance of any invalid or unenforceable term or provision of the DSA. On review, plaintiff argued, inter alia, that the arbitration agreement within the DSA was unconscionable because it required him to arbitrate his wage and hour claims but prohibited the arbitrators from granting him relief on those claims. Plaintiff based his argument on a provision of the arbitration agreement that stated that the arbitrators could not “alter, amend or modify” the terms and conditions of the DSA. The Court of Appeals agreed with defendant’s reading of the DSA, as did the Supreme Court: read in the context of the DSA as a whole, the provision that the arbitrators may not “alter, amend or modify” the terms and conditions of the DSA “is not plausibly read as a restriction on their authority to determine what terms are enforceable or what law is controlling.” View "Gist v. Zoan Management, Inc." on Justia Law

The Court of Chancery granted summary judgment in favor of Respondents and confirmed a May 10, 2021 arbitration award, holding that this court was obliged to grant Respondents' cross-motion for summary judgment to confirm the award.Respondent commenced an arbitration proceeding against Petitioner asserting several claims relating to amendments to the parties' LLC agreement. After the arbitrator issued decisions, Petitioner filed a petition to vacate the award in part. Respondent and affiliated entities filed a counterclaim to confirm the arbitration award. All parties moved for summary judgment. The Court of Chancery granted summary judgment in favor of Respondents and confirmed the arbitration award, holding that Petitioner's challenges to the award failed. View "Polychain Capital LP v. Pantera Venture Fund II LP" on Justia Law

Fairway, co-owned by Johnson, who is African-American and Native-American, contracted with FedEx to deliver packages. FedEx later assigned Fairway's contract to another company. Johnson's suit under 42 U.S.C. 1981, alleged racial discrimination and breach of contract. A second complaint was voluntarily dismissed. According to FedEx, an arbitration settlement was reached, under which Johnson released all claims against FedEx. Johnson disputes that she was a party to any settlement.Johnson filed another suit against FedEx, claiming racial discrimination and that FedEx blocked a contract assignment to her as an individual and prevented an assignment to BN, a company of which she was the majority shareholder. The court dismissed her suit, rejecting Johnson’s argument that as Fairway’s business contact, she qualified as a party to the contract. Johnson was granted two weeks to amend her complaint, according to precise directions concerning the need for proof that Johnson asked FedEx to approve an assignment to Johnson. Johnson's amended complaint replaced herself as the plaintiff with a corporation, DJM, asserting she “was to be the majority shareholder” of DJM. The complaint did not allege that FedEx had blocked an attempted assignment to Johnson individually but alleged that FedEx blocked an assignment to DJM.The court dismissed, noting the “four-year statute of limitations for Johnson’s Section 1981 claim ha[d] elapsed.” The Seventh Circuit affirmed. “Given this procedural history, the district court could have done more than admonish Johnson.” FedEx could have been awarded its reasonable attorneys’ fees. View "DJM Logistics, Inc. v. FedEx Ground Package System, Inc." on Justia Law

In 2007, Transit was awarded an exclusive license to bring telecommunications services to 277 New York City subway stations. Transit subcontracted with Fiber-Span, to develop remote fiber nodes to amplify telecommunication signals in the first six subway stations to receive service. Fiber-Span agreed to subsidize certain developmental costs, hoping to be selected as the contractor for the remaining 271 subway stations. Transit agreed that, if Fiber-Span was not selected to supply nodes for the remaining stations, Transit would reimburse those front-loaded costs. The relationship deteriorated. Transit asserted that Fiber-Span remained in breach of contract even after attempts to remediate problems but nevertheless took the network live. Transit insisted that Fiber-Span replace the nodes. Fiber-Span said it would do so only after it was awarded a contract for the remaining stations. Transit continued to use the nodes for two more years, then sued in New York state court. Fiber-Span filed for bankruptcy.The Third Circuit concluded Transit’s decision to keep using the nodes was consistent with the acceptance of non-conforming goods. Fiber-Span breached the contract; the damages must reflect the difference in value between what Transit received and what it was promised, which is less than what the bankruptcy and district courts awarded. Transit was not required to compensate Fiber-Span for not selecting it to provide nodes for the remaining subway stations. Transit’s claim to the payment on Fiber-Span's performance bond is time-barred. View "In re: Fiber-Span Inc" on Justia Law

The United States Court of Appeals for the District of Columbia Circuit reversed the judgment of the district court declining to reach the merits of Plaintiffs' complaint challenging a determination of the Federal Deposit Insurance Corporation (FDIC) as unlawful under the Administrative Procedure Act (APA), 5 U.S.C. 706(2), holding that the district court erred in concluding that the FDIC exceeded its authority in making the determination.Plaintiffs, two bank executives, were fired after a proposed merger because they refused to accept a reduction in the amount of a payment that was contractually provided for them. Plaintiffs sued the bank that terminated them and the bank with which it merged, alleging that they were entitled to the full payments. The banks, in turn, sought guidance from the FDIC as to whether the relief sought by Plaintiffs would constitute a statutorily-restricted "golden parachute" payment. The FDIC responded that the payment would constitute a golden parachute. Plaintiffs then brought this action challenging the FDIC's determination as unlawful under the APA. The district court declined to reach the merits, concluding that the FDIC lacked authority to render a golden parachute determination at all. The Court of Appeals reversed and remanded the case, holding that the district court erred in concluding that the FDIC lacked authority to render its golden parachute determination. View "Bauer v. Federal Deposit Insurance Corp." on Justia Law